Netto UK

Netto UK was the British discount-supermarket operation of Danish retailer Salling Group, formerly known as Dansk Supermarked. It entered the United Kingdom on 13 December 1990, opening its first English store in Leeds. The business established its UK headquarters in South Elmsall, West Yorkshire, and initially concentrated on central England before extending its presence into southern England, including London. Its stores followed a discount-supermarket format, combining low prices with a relatively limited assortment and a mixture of private-label and branded goods. Some branded products were obtained through parallel imports, and selected promotional offers were restricted in quantity to help maintain availability for shoppers. The chain expanded gradually during the 1990s and 2000s. In January 2005, Netto announced a proposed £200 million investment programme in South Wales that was expected to create approximately 1,700 jobs. The plan was later abandoned because of logistical difficulties. Stores in Barry and Caerphilly were sold, and the employment expansion ultimately did not occur at the scale originally envisaged. By May 2010, Netto had 193 stores across England and Wales. In May 2010, Asda agreed to acquire Netto UK for £778 million. The transaction was intended to strengthen Asda's smaller-store portfolio, but competition requirements meant that not every location could be retained by the buyer. Most of the acquired estate was converted to Asda stores, with the rebranding programme completed in November 2011. Other locations were transferred to Morrisons, Haldanes' Ugo convenience operation and other retailers; Haldanes subsequently entered administration, and stores associated with that transaction were later sold to Poundstretcher or otherwise redeveloped. Several former sites were demolished or repurposed. Netto returned to Britain in June 2014 through a new 50:50 joint venture between Salling Group and Sainsbury's. The new concept targeted stores of approximately 10,000 to 15,000 square feet and initially focused on northern England. The first new outlet opened at Moor Allerton in Leeds on 6 November 2014, followed by locations including Sheffield, Manchester, Doncaster and Ormskirk. A former Co-operative Food store in Hedon, East Yorkshire, was also announced as a future Netto location in 2015. Although the venture planned to operate around 15 stores, it had 13 stores by January 2016. In July 2016, Sainsbury's and Salling Group announced that they would end the joint venture after a strategic review. Sainsbury's decided to concentrate investment on its core business rather than commit further resources to the partnership. All of the revived Netto stores were closed during August 2016, ending the brand's direct supermarket operations in the United Kingdom. Netto UK therefore represents two distinct phases: a long-running first operation that ended with the sale to Asda, and a much smaller relaunch that ended after approximately two years.

Netto UK began trading in England on 13 December 1990, when the Danish retail group Salling Group brought its discount-supermarket format to Leeds. The UK headquarters was located in South Elmsall, West Yorkshire. The chain's initial expansion was concentrated in central England, later reaching southern England and London. Its retail proposition was based on discount pricing, a relatively focused assortment and a combination of branded and own-label goods. The business also sold some branded products sourced through parallel imports. Promotional limits, including restrictions on the number of identical offer items a shopper could buy, were used as part of the operating model. In 2005, Netto outlined a proposed £200 million investment in South Wales. The plan was expected to generate about 1,700 jobs, but logistical problems caused it to be cancelled. Stores in Barry and Caerphilly were sold, and the expansion did not deliver the planned employment scale. Despite this setback, the wider chain continued to grow. By May 2010 it operated 193 stores in England and Wales. The first phase of the UK business ended in May 2010, when Asda acquired Netto for £778 million. Asda sought to enlarge its smaller-store network. Competition requirements meant that part of the estate had to be sold rather than converted by Asda. The majority of the stores were rebranded as Asda outlets, with the main conversion programme completed by 29 November 2011. Other stores went to Morrisons and Haldanes' Ugo operation, while some locations were demolished or later redeveloped. Haldanes entered administration in February 2012, after which associated stores were sold to Poundstretcher. Salling Group returned the Netto name to Britain in June 2014 through a 50:50 partnership with Sainsbury's. This second format was designed for stores of roughly 10,000 to 15,000 square feet and was initially aimed at northern England. The first new store opened at Moor Allerton in Leeds on 6 November 2014. Additional outlets followed in Sheffield, Manchester, Doncaster and Ormskirk, and a former Co-operative Food store in Hedon was selected for conversion. The partnership planned to reach approximately 15 stores, but the estate stood at 13 stores by 25 January 2016. On 4 July 2016, Sainsbury's and Salling Group announced that the partnership would be discontinued after a strategic review. Sainsbury's elected to prioritise its principal business and did not wish to make further investment in the venture. The revived stores closed during August 2016. Netto UK has consequently been defunct since 2016, with its history divided between a substantial first operation acquired by Asda and a short-lived relaunch operated with Sainsbury's.

• 2016

  UK operations close

  [1]Netto UKen.wikipedia.org

  The Sainsbury's partnership ended and all revived Netto stores closed during August.

• 2014

  Netto relaunches with Sainsbury's

  [1]Netto UKen.wikipedia.org

  Salling Group and Sainsbury's formed a 50:50 joint venture, with the first new store opening in Leeds in November.

• 2011

  Majority of stores rebranded as Asda

  [1]Netto UKen.wikipedia.org

  The principal rebranding programme was completed by 29 November.

• 2010

  Netto reaches 193 UK stores

  [1]Netto UKen.wikipedia.org

  By May, the chain operated 193 stores across England and Wales before its sale to Asda.

• 2010

  Asda acquisition

  [1]Netto UKen.wikipedia.org

  Asda acquired Netto UK for £778 million.

• 2005

  South Wales investment plan cancelled

  [1]Netto UKen.wikipedia.org

  A proposed £200 million South Wales expansion was abandoned because of logistical difficulties.

• 1990

  First Netto UK store opens

  [1]Netto UKen.wikipedia.org

  Netto began UK operations in Leeds on 13 December, establishing its British headquarters in South Elmsall, West Yorkshire.

A value-focused discount supermarket offering a compact assortment at prices intended to be close to wholesale levels, with a mix of private-label, branded and parallel-imported products.

• Grocery retail · 1990

  Discount grocery assortment

  Netto stores offered a discount-supermarket range spanning everyday packaged groceries, chilled and frozen food, fresh food, household goods and personal-care products. The assortment was more focused than that of a full-line supermarket and was designed around value pricing. Stores combined private-label merchandise with recognisable branded products, including Pepsi and Walkers Crisps, and also carried some parallel-imported branded goods.

• Retail promotion · 1990

  Promotional value offers

  A notable part of the Netto proposition was its use of low-price promotions and purchase limits. Certain offers were restricted to six units per customer, a policy intended to distribute limited promotional stock more fairly among shoppers. The approach supported the chain's discount positioning while allowing it to sell both everyday products and temporary value deals.

• 2016

  Closure of the revived Netto estateStrategy

  Background

  After reviewing the partnership, Sainsbury's chose to focus on its main business rather than make further investment in the Netto venture.

  Action taken

  Sainsbury's and Salling Group ended the 50:50 joint venture and announced the closure of all stores during August 2016.

  Aftermath

  Netto ceased operating as a UK supermarket brand, ending its second period in the market.

  Source

• 2014

  Netto re-entry through Sainsbury's joint ventureStrategy

  Background

  Salling Group decided to return the Netto format to the UK after the brand had been absorbed into Asda's estate.

  Action taken

  Salling Group and Sainsbury's created a 50:50 joint venture targeting discount supermarkets of approximately 10,000 to 15,000 square feet, initially in northern England.

  Aftermath

  The venture opened 13 stores but did not continue beyond 2016.

  Source

• 2010

  Sale of Netto UK to AsdaM&A

  Background

  Netto had grown to 193 stores in England and Wales by May 2010. Asda sought to increase its presence in smaller-format retail and agreed to acquire the UK chain.

  Action taken

  Asda purchased Netto UK for £778 million. Competition requirements led to the disposal of a number of locations to Morrisons, Haldanes' Ugo operation and other retailers.

  Aftermath

  Most stores were converted to the Asda brand, with the main rebranding completed in November 2011. The original Netto UK operation ceased to exist as a separate chain.

  Acquisition price. £778 million (May 2010)

  Source

1. 1Netto UKen.wikipedia.org